Budget 2013 – the public sector squeeze can only get tighter, says ACCA

United Kingdom 21 Mar 2013

There really isn’t sufficient time, with two years to the next election, to set out a new comprehensive spending review. But it looks as if the childcare vouchers announced ahead of the Budget will have to be paid for from somewhere - and it looks like the public sector may very well take the brunt

—Gillian Fawcett, head of public sector,ACCA

While tax and childcare measures have been the story of yesterday’s Budget, ACCA (the Association of Chartered Certified Accountants) says that the public sector cannot manage further cuts, particularly mid-term in office

Gillian Fawcett, head of public sector, comments: 'There really isn’t sufficient time, with two years to the next election, to set out a new comprehensive spending review. But it looks as if the childcare vouchers announced ahead of the Budget will have to be paid for from somewhere - and it looks like the public sector may very well take the brunt.'

The Chancellor will also put a stop on ‘pay progression’ for the public sector, so the pay freeze at one per cent for another year to 2015-16 announced yesterday will risk causing further damage to staff morale in the sector.

A particular concern for ACCA is that parts of the public sector have yet to implement half of the spending cuts announced in 2010.

Gillian Fawcett explains: 'Parts of the public sector backloaded the cuts to reduce the pain and impact. If you take local government as an example, with in excess of £147billion of spending, the sector was asked to achieve 26 per cent spending cuts – that’s £7.6billion - between April 2011-2015.

'It still needs to implement and find half of these savings. So far some authorities have been able to use reserves and others have cut services, but if further spending cuts are imposed on local government there is little doubt that there will be a severe financial impact on frontline services.'

ACCA believes that the UK public sector is an obvious target for the Coalition Government, yet for the public and most vulnerable in society it provides vital services of last resort such as adult social care.

Gillian Fawcett adds: 'Further spending cuts will have a detrimental impact on these services, as other areas for finding savings have just about dried up.'